Renting VS. Owning a Home

As a homeowner, you can reasonably expect the equity in your home to increase over time as your mortgage is paid down. That, combined with regular appreciation in property values, can be a rapid and rewarding way to increase your net worth. In contrast, the person renting over the same amount of time is left with no property investment but may have enjoyed lower living expenses and the opportunity to invest their money elsewhere.

Here's how to do your own affordability check: Total up all your monthly debt payments including mortgage, add your expected monthly share of property taxes and heating, and then see what percentage of your monthly pre-tax household income it amounts to.

Lenders will let you go as high as 40 per cent, but that's going to leave you minimal room to save for retirement, your children's college or university education, stuff for the house and so on. When deciding what you can afford, consider an upper limit of 30 per cent to 35 per cent, unless you see big pay increases in your future.

Home ownership can be very rewarding and offers the owner privacy and freedom. If nothing else, paying a mortgage is like a forced savings plan - if you make sure to make the monthly payments and hold onto your real estate, you'll always have the equity in the end.

Of course, you also have to place a value on the enjoyment and satisfaction that you will derive from owning your own home. Owning a home isn't for everyone, but if you are ready to discuss the options, Julie and Nicole are happy to help!